Saudi Pipeline Restart Eases Oil Supply Risk as LNG Shortage Persists

The East-West pipeline in Saudi Arabia has resumed operations after being shut down since September 11 due to drone attacks. The pipeline is used as a land route to bypass the Strait of Hormuz and had been transporting 4 million barrels of oil per day before the attacks. With its return, a short-term supply restriction for Saudi Arabia has eased.

Despite this development, the region still faces threats. On Monday, only two ships carried commodity trade across the strait, compared to ten the day prior. The Strait of Hormuz remains a key chokepoint in global oil supplies.

Natural gas supply is even more disrupted, however. QatarEnergy stated that the recent attacks on Ras Laffan have wiped out 17% of Qatar's LNG output. The two affected plants will take three years to repair and are expected to impact the next phase of Qatar's LNG expansion.